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SEBI-RBI panel meet today

Our Bureau

MUMBAI, Sept. 17

THE SEBI-RBI standing technical committee will meet in Mumbai tomorrow to discuss introduction of margin trading in the Indian stock market and the guidelines for it.

Under margin trading, a stock broker has to pay part of the money for buying securities and the balance money has to be brought in either by a bank or other financier.

The Sebi Chairman, Mr D.R. Mehta, told presspersons here on Monday that the concept and guidelines for margin trading in India is still not clear and the technical committee will discuss this.

According to Mr Mehta the various issues likely to be taken up in tomorrow's meeting include whether the money can move in the stock market through a special purpose vehicle, money from clearing house of a stock exchange moves to stock broker or simply f ollow the US pattern of margin trading. In addition, the meeting would also discuss who will frame the guidelines for margin trading- RBI or Sebi.

Mr Mehta said the proposal on margin trading submitted by the newly-constituted 'Securities Industry Association' (under incorporation) was also discussed and further clarifications were sought on the proposal. Suggestions of other models of margin tradi ng were also discussed, he said.

On the issue of brokers turnover fee to be paid to Sebi, Mr Mehta said till now Rs 46 crore has been paid by the stock brokers and more brokers are expected to pay up. However, he said that no time frame has been set by the market regulator for stock bro kers to pay the money.

But Sebi Chairman said the market regulator was insisting brokers to pay 50 per cent of the turnover fee due for starting derivatives trading. In addition, Sebi has stipulated a condition that these brokers give an undertaking to pay the remaining amount with interest in one year time.